Geert
De Prest, Stewart and Stewart, of Washington, D.C., for
defendant-intervenor. With him on the brief were Terence P.
Stewart, Phillip A. Butler, and Nicholas J. Birch.

Before: Timothy C. Stanceu, Chief Judge.

OPINION

Timothy C. Stanceu Chief Judge.

Plaintiffs
challenge the antidumping duty cash deposit rate of 11.12%
ad valorem that the International Trade
Administration, U.S. Department of Commerce
("Commerce" or the "Department") applied
to imports of passenger car and light truck tires that they
produced and exported from the People's Republic of
China. For the reasons discussed below, the court sets the
cash deposit rate aside as contrary to law.

I.
Background

A.
The Parties in this Litigation

Plaintiffs
Cooper (Kunshan) Tire Co., Ltd. and Cooper Chengshan
(Shandong) Tire Co., Ltd. are affiliated Chinese producers
and exporters of tires for passenger cars and light trucks.
Plaintiff Cooper Tire & Rubber Company is an affiliated
exporter of the subject merchandise of these producers. In
this Opinion, the court refers to plaintiffs collectively as
"Cooper."

Cooper
was a respondent in parallel antidumping duty
("AD") and countervailing duty ("CVD")
investigations conducted by Commerce. The petitioner in the
investigations was the United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union (the "USW"), which is
the defendant-intervenor in this litigation.

B.
The Contested Determination and the Contested Cash Deposit
Rate

In June
2015, Commerce issued a decision published as Antidumping
Duty Investigation of Certain Passenger Vehicle and Light
Truck Tires From the People's Republic of China: Final
Determination of Sales at Less Than Fair Value and Final
Affirmative Determination of Critical Circumstances, In
Part, 80 Fed. Reg. 34, 893 (Int'l Trade Admin. June
18, 2015) ("Final AD Determination").
Commerce subsequently issued an "Amended Final
Determination" accompanied by antidumping duty and
countervailing duty orders, published as Certain
Passenger Vehicle and Light Truck Tires From the People's
Republic of China: Amended Final Affirmative Antidumping Duty
Determination and Antidumping Duty Order; and Amended Final
Affirmative Countervailing Duty Determination and
Countervailing Duty Order, 80 Fed. Reg. 47, 902
(Int'l Trade Admin. Aug. 10, 2015) ("Amended
Final Determination"). In the Amended Final
Determination, Commerce assigned Cooper an estimated dumping
margin of 25.84%. Id. at 47, 905. Commerce nominally
set the cash deposit rate at the same rate as the margin but
made a downward adjustment resulting in an applied cash
deposit rate of 11.12% for the merchandise Cooper exported to
the United States. Amended Final Determination, 80
Fed. Reg. at 47, 904 n.19; see also Final AD
Determination, 80 Fed. Reg. at 34, 897. Cooper claims
that the downward adjustment was improperly calculated and is
therefore insufficient. Commerce determined a CVD cash
deposit rate of 20.73% for Cooper, Amended Final
Determination, 80 Fed. Reg. at 47, 907, which Cooper
does not contest in this litigation.

Commerce
initially selected Shandong Yongsheng Rubber Group Co., Ltd.
("Yongsheng") and GITI Tire Global Trading Pte.
Ltd. and its affiliates ("GITI") as the only two
mandatory respondents in the AD investigation.
Antidumping Duty Investigation of Certain Passenger
Vehicle and Light Truck Tires from the People's Republic
of China: Respondent Selection 4-5 (Int'l Trade
Admin. Aug. 27, 2014), ECF No. 33 (Admin.R.Doc. No. 304).
Commerce initially chose the same two companies as the
mandatory respondents in the parallel CVD investigation.
See Def.-Int. the USW's Opp'n to Pls.'
Mot. for J. on the Agency R., Ex. 1 at 4-5 (Apr. 14, 2016),
ECF No. 30 ("USW's Br."). In the Preliminary AD
Determination, Commerce stated that Yongsheng "did not
demonstrate that it is entitled to a separate rate" and
that "[a]ccordingly, we consider Yongsheng to be part of
the PRC-Wide Entity." Preliminary AD
Determination, 80 Fed. Reg. at 4, 252. The
"PRC-Wide Entity" includes the Chinese exporters
and producers Commerce determines not to have demonstrated
independence from the government of the PRC.

Prior
to publication of the Preliminary AD Determination, Commerce
selected Sailun Group Co., Ltd. ("Sailun") to
replace Yongsheng as the second mandatory respondent in the
AD investigation. See Antidumping Duty Investigation of
Certain Passenger Vehicle and Light Truck Tires from the
People's Republic of China: Selection of Additional
Mandatory Respondent (Int'l Trade Admin. Oct. 7,
2014), ECF. No. 33 (Admin.R.Doc. No. 617). Because Commerce
decided not to select Cooper as a mandatory respondent, and
because it rejected Cooper's request to be named a
voluntary respondent, in the AD investigation (decisions
Cooper does not challenge in this litigation), Cooper did not
receive an individual weighted average margin in the AD
investigation. Instead, Cooper was assigned the rate assigned
to all "separate rate" respondents in that
investigation, i.e., respondents that qualified for a rate
separate from the rate Commerce applied to the PRC-Wide
Entity. Commerce, however, chose Cooper as the second
mandatory respondent in the CVD investigation. USW's Br.,
Ex. 2 at 2. GITI remained as a mandatory respondent in both
investigations.

On June
18, 2015, Commerce published the final determination in the
antidumping duty investigation, Final AD
Determination, 80 Fed. Reg. at 34, 893, which Commerce
amended on August 10, 2015 for correction of ministerial
errors, Amended Final Determination, 80 Fed. Reg. at
47, 902. The final individual weighted average dumping
margins in the Amended Final Determination were 30.74% for
GITI and 14.35% for Sailun; Commerce assigned a rate of
25.84% to the separate rate respondents in the antidumping
duty investigation, including Cooper, calculated as the
weighted average of the two individual margins. Amended
Final Determination, 80 Fed. Reg. at 47, 905.

In the
Final AD Determination, Commerce announced that the cash
deposit rate for merchandise produced or exported by Cooper
would be calculated by making two downward adjustments to
Cooper's nominal cash deposit rate, which was the same as
the final dumping margin (determined at that time as 25.30%,
which Commerce applied to Cooper and all other separate rate
respondents). Final AD Determination, 80 Fed. Reg.
at 34, 897. For the first adjustment to the cash deposit
rate, Commerce stated that it would subtract from the
percentage the "export subsidy rate" of 11.13%,
which Commerce determined individually for Cooper in the
course of the companion countervailing duty investigation.
Id. The other separate rate respondents in the AD
investigation received an "all-others" export
subsidy...